Analysis Of M&A Of Steel Enterprise Sunder The Background Of De-capacity

Iron and steel industry is the pillar industry of China’s economic construction,which accounts for a large proportion of GDP.It is also the foundation and key of China’s manufacturing industry.Since the central government put forward the supply-side reform in 2015,as the leader of the supply-side reform,the success or failure of the production capacity of the iron and steel industry not only has a great impact on the transformation and upgrading of the entire iron and steel industry,but also affects people’s confidence in the whole supply-side reform.At present,China’s iron and steel industry has some problems,such as overcapacity,low industrial concentration and lack of competitiveness.In order to solve these problems,the central government,drawing lessons from the development process of iron and steel industry in developed countries,puts forward a new idea of mergers and acquisitions to promote capacity removal.As a practitioner of this idea,whether Baowu Steel can realize these changes is particularly critical.Firstly,from the theoretical point of view,this paper describes the definition,types,Payment methods and effects of mergers and acquisitions.This article then explains the background to the merger and acquisition between Baosteel and Wusteel,that is,the problems existing in the steel industry,and then introduces in detail the merger process,the specific motivation of the merger,the merger scheme,the choice of the payment method and the rationality of the payment method of the merger from the level of merger and acquisition.Secondly,this paper focuses on the impact of "capacity removal" on the merger and acquisition of Wu steel,and analyses the enterprise itself from the perspectives of finance,pursuit of synergy,capacity removal and influence enhancement.Through the analysis,it can be seen that after the merger and acquisition of WISCO,the profitability and operating capacity have achieved immediate results,but the solvency is not good.From the perspective of capacity removal,this paper also analyses the impact of capacity removal after mergers and acquisitions.Finally,this paper puts forward some suggestions for mergers and acquisitions in China’s iron and steel industry,and points out that mergers and acquisitions in iron and steel industry can be promoted from the perspective of enterprises and governments,so as to achieve better effects.